4 Things Everyone Should Know About Estate Planning
Estate planning shouldn’t be something that starts when you or a loved one reaches an end-of-life stage. If you start planning as you begin to accumulate assets then, revisiting your plan on an annual basis or around a major life event may not seem so daunting. One thing’s for sure -- you don’t want to be caught in a situation where you don’t have a will or estate plan laid out. What will happen to your assets, the wealth you’ve accumulated, or even treasured possessions after you die? If you don’t want a third party or the state to decide (and if you want to try to curb any inter-family squabbling) you need an estate plan. An estate plan will not only legally delineate who is on the receiving end of your estate, but a good plan will also minimize the taxes, legal fees, and court costs that often arise after death. Here are four things to know about estate planning.
1. Estate planning is for everyone
Here’s the thing, if you don’t have a plan then your estate will simply default to the rules of your state. And you might not like or agree with those rules. Estate planning isn’t just for the
ultra-wealthy and the elderly -- it’s for everyone. And really, it’s for those who you would leave behind when you die. With a plan, you assure that those people in your life that you want to inherit your assets don’t get shortchanged. In essence, an estate plan will allow you to have a voice, even when you’re no longer around.
2. Death is a hard thing to talk about
We’ve all experienced it before, but that doesn’t make death any less difficult or uncomfortable to talk about. But having a hard conversation now could help curb many, many more tense and painful conversations down the road. Tough topics are tackled throughout the estate planning process, no doubt. But, if you remind yourself and your loved ones of the importance of the goals of such an exercise -- to protect the family and safeguard your hard-earned dollars, setting everyone up for financial success -- the conversation might go a little smoother.
3. Avoid probate
While you can’t eliminate probate altogether -- you can help keep costs to a minimum and make the probate process as smooth as possible in what’s sure to be a difficult time for your loved ones. Probate is the legal process of administering a person’s estate after death. If you have a solid financial plan in place the courts will simply oversee the distribution of assets exactly how you outlined. When you don’t have a legal estate plan established the state will decide who gets what without taking into account your personal desires. Avoid putting the stress of unnecessary probate processes on to your loved ones.
4. Prevent (or reduce) inter-family squabbles
Working with a skilled estate planning attorney can help ensure your will is void of loopholes that could open up your estate and final wishes to any type of lawsuit. But in general, being clear about who is going to get what can help clear up and avoid legal challenges down the line; pick the right executor, hand down personal property as well as larger-ticket items, and include explanations if you think there could be any type of misunderstanding.